Meathead on Social Security
Michael Kinsley's column in the Washington Post today continues his crusade against the Administration's Social Security plans, particularly in regard to private accounts. In this case, he repeats an argument he says originated with Rob Reiner, the actor, director, and agitator for liberal causes. Kinsley says:
Bush might as well be proposing legislation that two plus two is five. And if that happened, there would be no shortage of Republicans prepared to endorse this view, experts on arithmetic to declare that it is a very difficult question, research to indicate that the answer may lie anywhere between 2.3 and 7.09, moderate Washington sages to urge caution, media to report both sides of the question, and media critics to accuse the media of a subtle bias in favor of two plus two is four.
The Meathead Proposition (in honor of Reiner's most famous role) is this. The case that there is a Social Security crisis and the proposal to address it through "personal retirement accounts" both depend on assumptions about the course of the economy over the next few decades. These assumptions are highly speculative, but that's okay. What's not okay is to assume one thing when you claim there is a problem and something different when you claim that you've got the solution.
I often agree with Kinsley on a variety of issues, but I rarely find myself agreeing with anything Meathead says. Goes to show you; even Hollywood elites aren't always wrong.
Bush might as well be proposing legislation that two plus two is five. And if that happened, there would be no shortage of Republicans prepared to endorse this view, experts on arithmetic to declare that it is a very difficult question, research to indicate that the answer may lie anywhere between 2.3 and 7.09, moderate Washington sages to urge caution, media to report both sides of the question, and media critics to accuse the media of a subtle bias in favor of two plus two is four.
The Meathead Proposition (in honor of Reiner's most famous role) is this. The case that there is a Social Security crisis and the proposal to address it through "personal retirement accounts" both depend on assumptions about the course of the economy over the next few decades. These assumptions are highly speculative, but that's okay. What's not okay is to assume one thing when you claim there is a problem and something different when you claim that you've got the solution.
I often agree with Kinsley on a variety of issues, but I rarely find myself agreeing with anything Meathead says. Goes to show you; even Hollywood elites aren't always wrong.
6 Comments:
Not argument for privatization, but let's remember what a Democratic President was saying 7 years ago:
President Clinton: "This Fiscal Crisis In Social Security Affects Every Generation." (President Bill Clinton, Remarks At Georgetown University On Social Security, Washington, DC, 2/9/98)
President Clinton: "[F]irst, And Above All, We Must Save Social Security For The 21st Century." (President Bill Clinton, State Of The Union, 1/19/99)
President Clinton: "So That All Of These Achievements – The Economic Achievements – Our Increasing Social Coherence And Cohesion, Our Increasing Efforts To Reduce Poverty Among Our Youngest Children – All Of Them Are Threatened By The Looming Fiscal Crisis In Social Security." (President Bill Clinton, Remarks At Georgetown University On Social Security, Washington, DC, 2/9/98)
President Clinton: "Now Is The Time To Strengthen Social Security For The Future. … We Can And Must Accomplish This Critical Goal For The American People." (The White House, “Presidential Statement On Social Security,” Press Release, 4/23/99)
President Clinton: "But Because A Higher Percentage Of Our People Will Be Both Older And Retired, Perhaps Our Greatest Opportunity And Our Greatest Obligation At This Moment Is To Save Social Security." (President Bill Clinton, Remarks To A National Forum On Social Security, Kansas City, MO, 4/7/98)
President Clinton: "[I]f You Don’t Do Anything, One Of Two Things Will Happen. Either It Will Go Broke And You Won’t Ever Get It, Or If We Wait Too Long To Fix It, The Burden On Society … Of Taking Care Of Our Generation’s Social Security Obligations Will Lower Your Income And Lower Your Ability To Take Care Of Your Children To A Degree That Most Of Us Who Are You Parents Think Would Be Horribly Wrong And Unfair To You And Unfair To The Future Prospects Of The United States." (President Bill Clinton, Remarks At Georgetown University On Social Security, Washington, DC, 2/9/98)
President Clinton: "And Above All, To My Fellow Baby Boomers, Let Me Say That None Of Us Wants Our Own Retirement To Be A Burden To Our Children And To Their Efforts To Raise Our Grandchildren. It Would Be Unconscionable If We Failed To Act, And Act Now, As One Nation Renewing The Ties That Bind Us Across The Generations." (President Bill Clinton, Remarks To A National Forum On Social Security, Kansas City, MO, 4/7/98)
Scott, President Clinton was right. The problem now is, President Bush's plan for private accounts does nothing to solve the problem of Social Security insolvency. In fact, it probably makes things worse for many years to come, given the huge cost of transitioning to private accounts.
Privatization is only a small part of the solution. Democrats are flat against anything this time around, which I find basically abhorrent. Take a look at the Graham or Kolbe-Stenholm proposals (they're at centrists.org)
I find the argument that "President Clinton said thus" seven years ago so dishonest and tedious. The projections from SS at that time were much different than now.
Each year there is a projection completed by the SS folks. For the last 5-10 years, the SS folks have adjusted the solvency date out. The last projection by the CBO is 2052. SS is set to do a new projection later this year which will likely push it out even further.
Carla - As a side note, I sent you an email over a month ago about the basics of investment, and the difference between it and supply side economics. You promised to get back to me--I'm still waiting.
Enron, Tyco, Worldcom, NYSE scandal, mutual fund company scandals, the dot coms, and others should still ring in our ears when we consider privatization of Social Security. Let us not forget either the crash of 2000, or that of 1929. What would have happened to your Social Security retirement had you invested 10 years of a bubble market, and wanted to retire in 2001? Have we forgotten about 401k plans with their matching funds? (100% return on investment) Please refer to my blog (billowrites) for my case.
What about Medicare which is in worse shape?
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